Gift 


Trading  With  Australasia 


COMPLIMENTS 

FRANK  KENNEDY 

R  EPRESENTATIVE 

907  KOHL  BUILDING 
SAN  FRANCISCO,  CAL 


Guaranty  Trust  Company 
of  New  York 


Trading  With  Australasia 


Guaranty  Trust  Company  of  New  York 

140  Broadway 

FIFTH     AVENUE     OFFICE  MADISON  AVENUE  OFFICE 

Fifth  Avenue  and  43r<l  Street  Madison  Avenue  and  60th  Street 

LONDON     OFFICES  LIVERPOOL       OFFICE 

32     Lombard     Street,     E.     C.  27  Cotton  Exchange  Buildings      * 

5  Lower  Grosvenor  PI.,   S.  W. 

PARIS     OFFICE  HAVRE     OFFICE  BRUSSELS     OFFICE 

1    and     3     Rue     des     Italiens  122      Boulevard     Strasbourg  158        Rue        R  ovale 


COPYRIGHT,    1910 
GUARANTY  TRUST  COMPANY  OF  NEW  YORK 


<&L^ 


Trading  with  Australasia  \ 


WE  have  made  rapid  strides  in  build- 
ing up  commercial  relations  with 
Australia  in  the  past  year,  yet  the  people 
of  the  United  States  know  little  about 
the  vast  resources  of  the  island  continent, 
a  country  larger  than  the  United  States, 
excluding  Alaska,  and  with  a  population 
less  than  that  of  New  York  City.  We  have 
only  a  vague  conception  of  its  millions  of 
acres  of  grazing  lands — in  a  climate 
which  permits  the  stock  to  feed  on  the 
natural  pastures  the  year  round — and  of 
its  enormous  tracts  suitable  for  the  grow- 
ing of  practically  all  agricultural  products, 
such  as  wheat,  alfalfa,  oats,  rye,  sugar 
cane,  bananas  and  pineapples,  and  other 
tropical  fruits. 

In  1913  Australia  bought  German 


goods  valued  at  $35,000,01)0,  VncTtne 
United  States  sold  her  only  $25,000,000. 
In  the  year  ending  June  30,  1919,  Amer- 
ican exports  to  Australia  amounted  to 
$109,000,000,  there  being  of  course  no  Ger- 
man exports  during  the  war.  Sentiment 
against  the  Germans  is  still  very  strong  in 
Australia,  and  the  United  States  will  prob- 
ably import  a  large  share  of  the  commodi- 
ties formerly  sent  to  Germany.  Before  the 
war  British  exports  to  Australia  amounted 
to  about  $250,000,000  yearly,  and  the 
principal  exports  from  Australia — wool, 
gold,  wheat,  meat,  hides,  and  skins — were 
shipped  to  the  English  market.  The  sub- 
sequent curtailment  of  exports  from  Eu- 
rope resulted  in  a  large  increase  in  trade 
with  Japan,  which  supplied  Australia  with 


Parliament  House,  Melbourne,  Capital  of  Victoria 


[8] 

SJ48851 


The  railway  viaduct  in  Melbourne 


quantities  of  glass,  china,  metal  goods, 
chemicals  and  matches,  hosiery,  under- 
wear, calico,  prints,  and  other  cotton 
goods. 

Australia's  Resources 

The  greatest  producer  of  wool  in  the 
world,  and  ranking  high  among  the  na- 
tions exporting  wheat,  Australia  is  also  a 
metallurgist's  paradise,  containing  rich 
workings  of  iron,  zinc,  gold,  copper, 
tin,  silver,  molybdenite,  tungsten  ores, 
platinum,  and  radio-active  uranium  ores, 
as  well  as  deposits  of  diamonds,  sapphires, 
emeralds,  opals,  turquoise,  tourmaline, 
and  rubies. 

Australia's  resources  are  such  that  she 
could  easily  support  a  population  of  50,- 
000,000.  The  Eastern  states,  New  South 
Wales,  Victoria,  and  Queensland,  have 
comparatively  little  arid  interior.  All  the 
states  are  undoubtedly  capable  of  great 
development.  In  Queensland,  which 
runs  into  the  tropical  and  subtropical 
?ones,  practically  anything  can  be  grown 
-^-dairy  products  and  grain  abound  in  the 


South,  and  a  few  hundred  miles  north 
pineapples,  bananas,  and  sugar  cane  grow 
in  abundance.  South  of  Victoria  the 
small  island  of  Tasmania  has  a  climate 
probably  unequalled  anywhere  in  the 
world,  with  fine  resources  of  minerals  and 
grain. 

The  Australian  market  is  especially  de- 
sirable to  the  United  States,  as  the  sea- 
sons are  the  reverse  of  those  here,  the 
Australian  summer  being  at  the  time  of 
the  American  winter.  Owing  to  the  cus- 
tom of  Australian  merchants  of  placing 
their  orders  about  nine  months  before  the 
goods  are  required,  orders  in  sufficient 
volume  would  enable  American  manufac- 
turers to  run  continuously  in  the  domestic 
"off  season."  Australian  orders  could  be 
filled  during  the  dull  season  which  occurs 
in  the  United  States  between  the  regular 
seasonal  shipments  for  domestic  trade. 

Credits  a  Drawback  to  Trade 

"One  of  the  great  drawbacks  to  trade 
relations  between  the  two  countries  is  the 
question    of    credits,"    writes    American 


4] 


Trade  Commissioner  Ferrin  from  Mel- 
bourne. "American  manufacturers  would 
hardly  consider  appointing  an  Australian 
representative  and  allowing  him  to  take 
orders  on  open  account,  with  thirty  to 
sixty  days'  sight  draft  after  arrival  of  the 
goods.  The  American  salesmen  would 
find  considerable  difficulty  in  ascertaining 
the  financial  standing  of  local  merchants, 
and,  on  the  other  hand,  Australian  mer- 
chants accustomed  to  the  liberal  terms 
granted  by  English  and  German  houses, 
would  not  be  inclined  to  make  purchases 
and  pay  cash  when  the  goods  were  shipped. 
Some  Australian  bankers  realize  the  situ- 
ation and  are  willing  to  make  arrange- 
ments with  New  York  banks  to  pay  Amer- 
ican manufacturers  for  their  goods  upon 
receipt  of  the  invoices  and  shipping  docu- 
ments, when  properly  authorized  by  the 
Australian  merchants,  who  will  pay  the 
interest,  exchange  and  collection  fees  upon 
terms  prearranged  with  the  bankers.  This 


gives  the  American  merchant  the  cash 
payment  which  he  desires,  guarantees  the 
Australian  that  the  goods  have  actually 
been  shipped,  and  in  addition  local  banks 
provide  the  credits  necessary  for  the  Aus- 
tralians to  do  business." 

Australian  merchants  feel  that  while  it 
is  advisable  for  representatives  of  Amer- 
ican firms  to  make  trips  to  the  Australian 
market,  in  order  to  establish  connections, 
local  agents  can  conduct  the  business 
more  satisfactorily,  as  they  know  the 
financial  standing  of  the  prospective  pur- 
chasers more  intimately,  and  also  the  best 
time  to  make  shipments  and  the  grade  of 
goods  required? 

Articles  Australia  Imports 

The  principal  articles  exported  from  the 
United  States  to  Australia  are  listed  be- 
low: 

Foodstuffs  of    animal    origin — preserved  fish, 
meats 


The  business  section  of  Melbourne 
\5] 


In  the  Botanical  Gardens  of  Melbourne 


Rosin,  cork  and  fibres 

Wearing  apparel  and  textiles  of  all  kinds 

Oils,  fats  and  waxes 

Paints  and  varnishes 

Lithographic  oil  and  whetstones 

Aluminum  and  bronze 

Copper  tubing 

Iron  and  steel 

Cash  registers  and  computing  machines 

Gas  and  oil  engines 

Agricultural  and  dairying  machinery 

Electrical  appliances 

Mining  machinery  and  tools 

Sewing  machines  and  typewriters 

Metal  manufactures  of  all  kinds 

Corrugated    and    galvanized    iron — wire    and 

wire  netting 
Lamps  and  lampware 
Nails  and  all  tools  of  trade 
Boots  and  shoes 

Rubber  and  leather  manufactures 
Furniture  and  dressed  and  undressed  timber 
Glass  and  glassware,  earthenware 
Paper  and  stationery 
Fancy  goods  and  jewelry 
Chemicals  and  fertilizers,  drugs 
Brushware 
Oilmen's  stores 
Soap 

Automobiles,  bicycles  and  tricycles,  and  other 
vehicles 

Pianos  and  musical  instruments 

Foodstuffs    of    vegetable    origin — fresh    and 

dried  fruits,   infants'    and   invalids'   foods, 

hops 

Tobacco  (mostly  unmanufactured),  glue  and 
gelatine 


Broadly  speaking,  there  is  a  preferen- 
tial tariff  in  favor  of  the  United  Kingdom, 
of  five  to  ten  per  cent.  In  some  items  it  is 
much  higher. 

What  Australia  Needs 

There  is  a  great  scarcity  of  many  goods 
in  Australia.  The  chief  shortage  in  stocks 
which  must  be  replenished  by  importa- 
tions is  found  in  tin-plate,  galvanized  iron, 
wire  and  copper  cable,  steel  and  iron  gir- 
ders, joists,  plates,  sheets  and  bars,  gas 
tubes  and  fittings,  paints,  shellac,  putty, 
cutlery,  tools,  aluminum,  enamelled  and 
hollow  ware,  gasoline  engines,  motor 
goods,  builders'  hardware  of  all  sorts,  com- 
position roofing  products,  chemicals,  food 
products,  and  office  appliances. 

Articles  known  as  "tools  of  trade"  are 
purchased  in  large  quantities  from  Amer- 
ica, despite  a  natural  preference  for  Brit- 
ish goods.  Australia  is  rapidly  increasing 
her  manufactures,  and  there  is  an  insis- 
tent demand  for  certain  classes  of  Ameri- 
can machinery  and  machine  tools.  As  a 
majority  of  the  engineering  establish- 
ments are  also  jobbing  shops,  the  en- 
gineers in  charge  are  averse  to  buying  from 
catalogues  and  desire  actual  demonstra- 
tions, especially  of  new  machines.    Most 


[6 


of  the  sales  are  accordingly  made  after  a 
sample  machine  has  been  received  by  the 
agent  from  the  importer.  A  substantial 
additional  discount  on  introductory  orders 
should  be  allowed,  especially  on  highly  spe- 
cialized lines;  otherwise  there  is  not  suffi- 
cient incentive  to  warrant  the  importer 
taking  the  risk  of  adaptation  of  the  ma- 
chine   to    local    conditions. 

Good  Agents  Essential 

Types  of  American  machines,  which  sub- 
sequently enjoyed  exceptional  sales,  were 
kept  out  of  the  Australian  market  for  years 
because  our  manufacturers  did  not  put  a 
sample  machine  into  the  hands  of  a  good 
agent,  and  they  were  finally  introduced 
by  an  importer  who  took  a  chance  on 
their  success.     Unnecessary  risk  can  be 


avoided  by  the  exporter  by  thorough  in- 
vestigation in  advance — through  bank- 
ing connections — to  discover  the  relia- 
bility of  the  Australian  agent. 

The  greater  number  of  the  manufactur- 
ing plants  and  the  largest  engineering 
shops  are  in  Sydney,  New  South  Wales, 
and  in  Melbourne,  Victoria,  which  places 
produce  an  equal  amount  of  manufactured 
goods.  The  rapid  expansion  of  the  meat 
and  meat-canning  industries  of  Queens- 
land will  result  in  an  increased  demand 
for  American  machinery.  The  same  is 
true  of  Western  Australia,  with  its  gold 
mining  development. 

Selling  and  Collection  Methods 

The  exclusive  agency  is  a  popular  Aus- 
tralian means  of  selling  and  distributing 


Government  railroad  shops  at  Williamstown,  Victoria 
[71 


Bridge  Street,  Sydney,  the  capital  of  New  South  Wales 


machinery  and  accessories.  It  is  a  coun- 
try where  vast  distances  must  be  trav- 
elled in  seeking  orders,  and  where  modern 
machinery  is  just  being  introduced,  and 
therefore  the  agent  who  stocks  a  new  ma- 
chine as  an  experiment  usually  asks  that 
he  be  protected  by  an  exclusive  contract. 
Before  closing  exclusive  contracts  for  any 
line  of  goods,  however,  it  is  highly  impor- 
tant to  ascertain  whether  the  firm  is  really 
in  the  wholesale  business,  and  whether  it 
possesses  the  personnel  and  equipment  to 
produce  results .  Unfortunate  results  have 
followed  carelessness  on  the  part  of  Amer- 
ican manufacturers  in  this  regard,  in 
some  instances  exclusive  agency  contracts 
having  been  granted  to  firms  in  Australia 
engaged  in  the  retail  business. 

Cash  Payments  Against  Documents 

Since  the  war,  many  Australian  import- 
ers have  arranged  for  cash  payment 
against   documents   in  New  York,   and 


there  is  little  probability  of  an  early  re- 
turn to  the  old  method  of  sight  draft  with 
documents.  The  price  list  in  almost  uni- 
versal use  in  Australia  is  made  on  a 
small  loose  sheet  with  3%  inch  holes  at 
3  inch  centers.  The  advantage  of  con- 
forming to  such  styles  of  price-lists  and 
insuring  the  maintenance  of  complete 
files  of  prices  is  apparent.  Australian  im- 
porters are  close  readers  of  the  leading 
American  machinery  trade  journals,  and 
information  regarding  new  types  of  ma- 
chines is  often  requested  on  the  strength 
of  these  advertisements. 

Packing  Goods  for  Shipment 

Practically  all  machinery  is  subject  to 
customs  tariff  in  Australia  and  must  un- 
dergo inspection,  and  for  this  reason  it  is 
preferable  to  leave  one  board  on  the  top 
of  the  case  not  hoop-ironed  or  nailed,  but 
simply  screwed  down.  This  board  should 
be  located  so  as  to  give  a  good  view  of  the 


[s 


machine.  The  loading  and  warehousing 
facilities  in  Australia,  outside  of  the  State 
capitals  and  one  or  two  ports,  such  as 
Newcastle,  are  not  the  best,  and  few 
cranes  are  employed,  so  that  strong 
packing  is  desirable. 

Lathes  are  the  most  important  essential 
in  the  machine  shops  which  are  springing 
up  in  Australia.  As  the  majority  of  the 
work  in  these  shops  is  jobbing,  the  ma- 
chine tool  should  be  universal.  Gap 
lathes,  for  instance,  permit  one  machine 
to  cover  a  wide  range  of  work  and  are  very 
popular  in  Australia,  one  American  ma- 
chine of  this  universal  type  enjoying  a 
very  large  sale.  Now  that  the  war  is  over 
there  are  exceptional  opportunities  in  Aus- 
tralia for  the  sale  of  construction  mate- 
rials, and  many  public  improvements  are 
contemplated,  such  as  additions  to  rail- 
ways and  new  lines,  bridge  building,  con- 
struction of  subways,  extension  of  wharves, 
opening  of  mines,  establishment  of  manu- 


facturing  plants   and   building   of  grain 
elevators. 

American  Shoes  in  Demand 

American  shoes  are  looked  upon  with 
the  same  high  favor  in  Australia  as  in 
other  parts  of  the  world.  Medium  and 
fine  grade  American  shoes,  although  sell- 
ing at  higher  prices  than  others  on  the 
market,  are  preferred  by  most  Australians 
and  they  are  quite  willing  to  pay  the  dif- 
ference. In  men's  shoes,  three-fifths  or 
more  of  the  trade  is  in  boots  (high  shoes), 
but  with  the  younger  men  shoes  and  Ox- 
fords are  gaining  in  popularity,  especially 
in  the  capital  cities.  In  women's  shoes, 
shapes  that  are  genuinely  new  in  America 
will  meet  with  Australian  approval.  Be- 
cause of  their  style,  American  "low  cuts" 
are  especially  popular.  Pumps  are  gen- 
erally referred  to  as  "court  shoes"  and 
stray  pumps  as  "bar  shoes."  For  smart 
American  shoes  from  the  best  makers  the 


Orient  Pier  and  Custom  House,  Sydney 
[91 


Australia  Is  the  Greatest  P 


Sheep  yarded 
for  shearing 


Double  shearing  board 
and  classers'  table 


Production  and  Exports  of  Wool 
During  the  year  1915-16  Australia 
produced  550,000,000  pounds  of  wool 
and  exported  491,000,000  pounds,  of 
which  80,000,000  pounds  were  scour- 
ed and  tops,  with  a  total  value  of 
$130,000,000. 


Mustering  sheep  for  shearing  yards 

r  io] 


er  Of  Wool  in  the  World 


Australian  Pastoral  Industry 

At  the  end  of  1916  Australian  flocks 
numbered  73,000,000  sheep.  For  the 
year  1915  the  value  of  the  pastoral 
products  of  the  Commonwealth  was 
estimated  at  $325,000,000. 


Baling  wool 
at  a  station 


A  single  board 
shearing  shed 


A  wool  show  room 
[11] 


A  steel  plant  at  Newcastle,  Mew  South  Wales 


women  are  willing  to  pay  fifteen  dollars 
and  eighteen  dollars  a  pair. 

The  Australian  market  for  children's 
footwear  is  simply  a  duplicate  of  the 
American  market,  with  the  greatest  de- 
mand for  cheap  and  medium  grades,  al- 
though the  better  stores  in  the  capital 
cities  find  a  ready  sale  for  the  most  ex- 
pensive lines.  Moccasins  (Indian  slip- 
pers) enjoy  a  good  sale  and  are  very  pop- 
ular— so  much  so,  in  fact,  that  several 
Australian  firms  have  undertaken  their 
manufacture,  but  their  production  does 
not  seem  to  lessen  the  demand  for  the 
American  article. 

Textiles 

The  importance  of  textiles  in  the  Aus- 
tralian import  trade  may  be  appreciated 
when  it  is  pointed  out  that  this  branch 
furnishes  about  25  per  cent,  of  the  total 
net  revenue  collected  from  customs  and 
excise.  The  handicap  in  the  past  to  the 
development  of  trade  with  American 
manufacturers  has  been  their  reluctance 
to  adopt  British  widths,  and  importers 
have  had  difficulty  in  placing  American 
goods  with  local  buyers  accustomed  to 
cutting  from  the  English  goods.  In  tick- 
ings the  variations  in  widths  are  as  follows : 
American,  31  to  33  inches;  English,  63  to 
72  inches.  For  prints,  the  American  width 
is  about  24  inches,  while  the  Australian  de- 

[ 


mand  is  based  upon  a  32  to  33 -inch  re- 
quirement. 

Another  complaint  has  been  that  Amer- 
ican manufacturers  will  not  cater  to  Aus- 
tralian tastes  in  the  matter  of  patterns, 
whereas  the  British  will  make  any  pattern 
the  buyer  desires.  American  packing  is  also 
criticized  by  the  Australians — as  in  other 
foreign  countries — and  it  is  pointed  out 
that  British  exporters  board  the  top  and 
bottom  of  each  bale  so  that  hooks  cannot 
penetrate,  and  the  bale  is  kept  in  shape. 
Australians  have,  however,  the  greatest  re- 
gard for  the  quality  of  the  American  cot- 
ton goods  and  there  is  no  quarrel  about 
prices.  American  cotton  tweeds  are  also 
in  favor. 

Quotations  Should  Be  C.I.F. 

A  gentlemen  who  has  travelled  the  An- 
tipodes very  widely  and  conducted  busi- 
ness dealings  in  many  parts  of  the  world, 
including  Australia,  has  written  the  Guar- 
anty Trust  Company  as  follows: 

Speaking  with  a  man  only  last  week  who  has 
represented  several  American  hardware  houses  in 
Australia,  New  Zealand  and  New  Caledonia  for 
eleven  years,  I  was  told  that  in  all  that  time  there 
had  been  scarcely  one  instance  of  a  bank  draft 
drawn  in  the  United  States  on  customers  here  to 
whom  he  had  sold  goods  but  "there  had  been 
some  trouble  in  connection  with  it." 

Further,  he  stated  deliberately  that  if  his  prin- 
cipals in  America  had  only  taken  the  trouble  to 

121 


quote  him  c.i.f.  prices  here  instead  of  quotations 
f.o.b.  port  of  shipment,  or,  worse  still,  f.o.b.  cars 
at  some  inland  point  in  the  U.  S.  A.,  he  would 
have  easily  quadrupled  the  volume  of  sales  in  the 
period  named. 

During  the  Russo-Japanese  War — 1904-5 — I 
was  controlling  the  import  department  of  the 
largest  merchandising  firm  in  Yokohama,  Japan, 
and  to  give  you  an  idea  of  the  volume  of  business 
we  imported  from  Canada  and  the  U.  S.  A. 
780,000  cases  of  canned  salmon  in  the  first  months 
of  the  war,  in  addition  to  huge  quantities  of  wheat, 
flour,  lumber,  canned  meats,  saddles,  horse 
blankets,  portable  field  forges,  wire  nails,  gal- 
vanized wire,  fertilizers,  railroad  material,  tin 
plates,  etc.,  most  of  which  were  sold  by  tender  to 
the  Japanese  Government  departments. 

I  well  remember  the  extreme  difficulty  we  ex- 
perienced in  getting  American  and  Canadian  ex- 
porters to  quote  us  prices  delivered  Japan,  al- 
though we  spent  money  lavishly  in  cabling  them 
to  do  so.  On  the  other  hand,  representatives  on 
the  spot  of  English,  French  and  German  manu- 
facturing firms  and  also  other  firms  in  those 
countries,  made  us  firm  offers  c.i.f.  and  e.  Japan 
ports,  in  Japanese  currency,  including  War  Risk. 
Despite  the  fact  that  in  many  instances  we  pre- 
ferred the  American  product,  our  choice  often 
quite  naturally  fell  to  the  European  article  be- 
cause we  knew  what  it  was  going  to  cost  laid 
down  at  our  door. 

With  the  approaching  official  declaration  of 
peace,  and  a  gradual  return  to  comparative  nor- 
mality, American  houses  must  be  prepared  to 
meet  the  thorough,  active,  keen,  painstaking 
methods  pursued  by  competitive  manufacturers 
of  other  countries. 


Temperamentally,  most  Americans  want  to  do 
things  in  a  "hurry-up,  shoot-it-along"  style.  It 
may  work  in  Kokomo  or  Kalamazoo  or  Keokuk, 
but  it  doesn't  get  the  business  for  United  States 
goods  in  Shanghai,  Singapore  and  Soerabaya.  I 
have  expended  much  effort  to  counteract  this 
tendency,  and  I  know  what  I  state  to  be  true. 

If  American  goods  are  to  reach  Persia,  Siam, 
Chile,  Siberia,  Australasia,  China,  or  elsewhere 
abroad,  they  will  have  to  be  quoted,  packed, 
shipped,  insured,  drawn  for,  and  delivered  as  the 
peculiar  or  particular  circumstances  require,  and 
only  in  this  way  will  the  United  States  manufac- 
turers get  their  rightful  share  of  that  overseas 
business  which  helps  to  lower  the  "overhead"  of 
factory  production,  and  stabilize  home  industry 
when  domestic  demand  falls  off. 

The  writer  goes  on  to  say :  "  Imagine  a 
salesman  for  Australian  wines,  eucalyptus 
oil  or  jam  calling  on  a  broker  in  Los  An- 
geles, Kansas  City,  Chicago,  Detroit  or 
Buffalo,  getting  favorable  inspection  of 
his  line,  and  on  being  asked  the  price  re- 
plying '  Seventeen  shillings  and  ten  pence 
farthing  per  dozen,  or  gross,  or  case,  f.o.b. 
Adelaide  or  Perth.'  It  would  not  require 
many  banks  to  handle  the  30  days  drafts 
he  would  draw;  but  if  the  salesman  knew 
{inter  alia)  the  packing,  gross  weight, 
cubic  measurement,  ocean  freight,  marine 
insurance,  exchange  conversion  from  sterl- 
ing to  dollars,  to  add  to  his  f.o.b.  cost  and 
quoted  a  c.i.f.  and  e.  price  (and  probably 


Ostrich  farming  in  New  South  Wales 
113] 


with  duty  paid)  in  United  States  currency, 
the  prospective  customer  would  grasp  it. 
Business  probably  would  result." 

The  National  Foreign  Trade  Council 
recently  called  the  attention  of  the  Amer- 
ican manufacturers  and  exporters  to  the 
confusion  resulting  in  Australia  over  the 
use  of  the  term  "F.O.B."  The  Council 
writes  in  part  as  follows : 

As  a  result  of  the  practice  complained  of,  a  sit- 
uation has  arisen  which  may  easily  prove  seri- 
ously detrimental  to  American  commerce  with 
Australia.  The  Australian  complaint  is  that  the 
American  manufacturers  and  exporters  who  have 
quoted  F.  O.  B.  New  York  have  interpreted  that 
quotation  to  include  merely  delivery  within  the 
limits  of  the  port  of  New  York,  and  not  neces- 
sarily actual  delivery  of  the  merchandise  on  board 
the  overseas  vessel.  The  Australian  contention 
is  that  the  term  F.O.B.  port  has  only  one  mean- 
ing, namely,  "  Free  on  board  overseas  vessel "  at 
the  port  named;  and  that  a  quotation  F.O.B. 
port  means  that  the  purchaser  has  no  charges  to 
meet  except  those  connected  with  ocean  freight, 
and  insurance. 

It  appears  that  some  American  manufacturers 
nd  exporters  who  have  quoted  prices  F.O.B. 
New  York,  or  other  port,  have  contented  them- 
selves with  the  delivery  of  the  goods  within  the 
limits  of  the  port  named,  instead  of  on  board 
overseas  vessel,  with  the  result  that  charges  for 
cartage,  lighterage,  storage  and  other  items,  have 


been  passed  on  to  the  Australian  purchaser  who 
had  understood  that  the  F.O.B.  port  quotation 
covered  delivery  of  the  goods  on  the  overseas  ves- 
sel. The  possibility  of  adverse  effect  upon  Amer- 
ican foreign  trade  in  this  situation  is  obvious,  and 
leads  the  National  Foreign  Trade  Council  to  urge 
upon  American  exporters  generally  the  wisdom 
of  following  invariably  a  practice  under  which 
complaints  cannot  possibly  arise. 

New  Zealand  Trade 

Trade  with  New  Zealand — a  thousand 
miles  from  the  Australian  continent — is 
quite  different  from  that  with  Australia, 
with  the  exception  of  engineering  appli- 
ances and  machinery.  The  climate  is  very 
similar  to  that  of  California.  As  to  the 
consumption  of  merchandise,  it  may 
serve  best  to  say  that  most  of  the  goods 
sold  there  are  similar  to  those  marketed 
in  the  smaller  cities  of  Pennsylvania  or 
Illinois.  The  population  is  largely  en- 
gaged in  farming,  only  a  small  percentage 
working  in  factories.  There  is  a  great  de- 
mand for  cottons,  flannels,  gloves,  velvets 
and  trimmings,  automobiles,  labor  saving 
machinery  of  all  kinds,  hardware,  espe- 
cially stoves,  axes,  saws,  picks,  spades, 
forks,  carpenters'  tools,  lamps,  wire  net- 
ting and  galvanized  iron,  and  there  is  a 


In  the  heart  of  Brisbane,  the  capital  of  Queensland 
f!4l 


A  view  of  Adelaide,  the  capital  of  South  A  ustralia 


good  opening  for  the  sale  of  American 
laces  and  embroideries. 

When  speaking  of  Australia  and  New 
Zealand  collectively,  the  Britisher  says 
"Australasia."  Almost  every  article 
made  in  Australasia  is  protected  by  an 
import  duty.  It  must  be  remembered 
that  Australia  and  New  Zealand  are  pros- 
perous countries  and  that  the  quality  of 
the  goods  sent  there  from  America  must 
be  equal  to  those  sold  in  New  York  or  Chi- 
cago. The  Australasian  wage  earners  are 
well  paid  comparatively  and  can  afford  to 
pay  for  the  best  quality.  In  selling  to  the 
agricultural  population  outside  of  the 
cities,  the  American  exporters  have  to 
deal  with  storekeepers'  associations, 
through  which  source  the  up-country 
stores  buy  large  quantities  of  goods. 

The  list  of  American  goods  advertised 
in  Australia  ranges  all  the  way  from  mo- 
tor trucks  to  chewing  gum,  and  includes 
typewriters,  clocks,  patent  medicines, 
pianos,  cameras,  fountain  pens,  corsets, 
toilet  articles  and  soaps.  California  ap- 
ples, asparagus,  sweet  corn  from  the  Mid- 
dle States,  canned  salmon  and  herring, 
sardines  and  lard  compounds  find  a  ready 
sale  in  Australian  markets.  A  large  trade 
has  grown  up  with  the  Pacific  Northwest 
in  lumber,  principally  Oregon  pine,  as  the 

[15 


result  of  the  lack  of  native  soft  woods 
suitable  for  building  purposes.  The  ex- 
tensive forests  of  Australia  are  made  up 
almost  entirely  of  hardwoods  and  are 
largely  of  the  eucalyptus  or  gum  species. 

Australian  Business  Methods 

Business  methods  are  somewhat  differ- 
ent from  our  own.  The  Australian  takes 
life  more  easily.  He  will  import  almost 
everything  we  have  except  our  nervous 
hurry  and  tenseness.  In  the  principal 
lines  of  trade  there  are  wholesalers  in  the 
capitals  of  the  different  states.  These 
wholesalers,  who  have  branches  in  all  the 
smaller  cities,  buy  direct  from  manufac- 
turers, domestic  and  foreign.  They  sell  to 
the  retail  trade  and  to  other  wholesalers, 
and  maintain  a  force  of  travelling  sales- 
men. 

One  of  the  most  striking  characteristics 
of  Australia  as  a  market  for  goods  is  the 
concentration  of  about  40  per  cent,  of  the 
population  of  the  country  in  the  capital 
cities.  A  similar  condition  cannot  be 
found  in  any  other  part  of  the  world.  An 
even  distribution  of  American  goods  may 
therefore  be  obtained  by  arrangements 
with  the  wholesalers  in  Brisbane,  Queens- 
land; Sydney,  New  South  Wales;  Mel- 
bourne,  Victoria;  Adelaide,  South  Aus- 

1 


tralia;  Hobart,  Tasmania;  and  Auck- 
land, Wellington,  and  Dunedin,  New  Zea- 
land. Each  state  in  Australia  handles  its 
own  business  and  there  is  not  much  com- 
petition. One  of  the  reasons  for  this  is 
that  the  railroads  in  the  various  states 
have  different  gauges,  which  makes  it  ne- 
cessary to  transfer  freight,  at  high  cost, 
at  the  boundary  lines. 

The  importing,  or  so-called  "indent" 
broker  is  an  old  established  institution  in 
Australia.    He  is  the  middleman  who  ar- 


goods  said  recently  that  the  quality  of 
Japanese  merchandise  is  rapidly  improv- 
ing. Last  year  a  Japanese  trade  com- 
missioner spent  several  months  in  Aus- 
tralia and  while  there  collected  large 
quantities  of  samples  and  made  a  careful 
study  of  Japanese  methods.  Many  of  the 
large  Australian  buyers  in  Japan  are  es- 
tablishing houses  there,  to  which  all  their 
purchases  are  sent  and  examined  to  ascer- 
tain whether  goods  conform  to  contract 
and  sample.    Other  houses  in  Japan  un- 


Hobnrt,  the  capital  of  Tasmania 


ranges  the  sale  between  the  manufacturer 
abroad  and  the  buyer  in  Australia.  These 
indent  houses  have  salesmen  and  sample 
rooms  and  are  an  important  factor  in  the 
Australian  trade. 

Japanese  Competition 

One  of  the  leading  importers  in  Aus- 
tralia of  American,  British  and  Japanese 


dertake  to  perforin  a  similar  service  for 
foreign-  purchasers,  for  which  a  commis- 
sion of  five  per  cent,  is  charged.  It  is  said 
that  when  an  Australian  importer  com- 
plains to  the  Japanese  Consul  General  at 
Sydney  or  any  other  state  capital  that 
purchases  are  not  according  to  sample,  the 
Japanese  consular  officer  immediately  re- 
ports to  his  Government  and  the  defec- 


161 


tive  purchase  is  traced  at  once  to  the  fac- 
tory where  the  article  was  made.  The 
Japanese  consular  officer  in  some  instances 
guarantees  on  behalf  of  his  Government 
the  quality  of  the  merchandise. 

Combinations  Favored 

Australian  business  houses  lately  have 
been  seeking  agencies  for  combinations 
of  American  manufacturers  organized 
under  the  Webb  Law,  handling  allied  lines 
of  goods  from  different  groups  of  manu- 
facturers, in  order  that  they  may  be  able 
to  furnish  full  lines  to  the  retailers  who 
deal  with  them.  Australia  fully  recog- 
nizes the  advantage  of  combination  in 
dealing  with  foreign  trade  and  she  is  ap- 
parently prepared  to  utilize  every  re- 
source in  aiding  her  own  people.  Business 
combinations  to  safeguard  special  inter- 
ests are  easily  initiated  and  are  fostered 
by  the  Australian  Government. 

A  good  example  of  this  is  the  case  of  the 
Australian  Zinc  Producers'  Association, 
organized  April  3, 1916,  which  brought  into 
one  group  all  the  Australian  mining  com- 
panies producing  zinc  concentrates.  This 
monopoly  was  organized  by  the  Federal 
Attorney  General,  the  Honorable  Hugh 
Mahan.  The  two  largest  producing  com- 
panies did  not  wish  to  join  the  combina- 
tion, but  a  forty -eight  hour  ultimatum  was 
sent  out  by  the  Government  and  within 
that  time  the  organization,  which  includes 
all  the  Australian  companies,  was  com- 
pleted. The  specific  object  was  to  pre- 
vent a  repetition  of  the  old  foreign  (mostly 
German)  control  of  the  metal  markets. 

The  organization  is  a  cooperative  insti- 
tution, the  members  of  which  are  pledged 
to  sell  the  whole  of  their  output  of  mar- 
ketable ore,  concentrates,  spelter  or  elec- 
trolytic zinc,  through  the  medium  of  the 
association  for  a  period  of  fifty  years.  The 
association  is  not  established  for  the  pur- 
pose of  unlimited  profit  or  gain,  as  in  the 
case  of  the  ordinary  trading  company,  but 
primarily  as  the  medium  for  the  disposal 

[ 


of  the  members'  zinc  products.  A  small 
commission  is  charged  on  all  transactions, 
and  if  the  revenue  exceeds  the  amount 
necessary  for  a  ten  per  cent,  dividend,  any 
balance  is  rebated  to  the  supplying  com- 
panies in  proportion  to  the  value  of  the 
products  realized.  The  head  office  is  in 
Melbourne,  with  an  office  in  London.  On 
the  Melbourne  directorate  the  Common- 
wealth is  represented  by  a  nominee,  and 
the  Imperial  Government  is  represented 
on  the  London  board. 

The  Broken  Hill  Combination 

In  the  same  year  (July  3,  1916)  the 
problem  of  the  treatment  and  realization 
of  the  large  output  of  the  silver-lead  con- 
centrates from  Broken  Hill  companies  was 
settled  permanently.  Every  mining  and 
trading  company  was  brought  into  the 
Broken  Hill  Associated  Smelters  Proprie- 
tary, Limited,  which  is  now  practically  a 
huge  cooperative  smelting,  refining,  and 
realization  institution  for  the  treatment 
of  silver-lead  and  gold  ores  and  concen- 
trates— probably  the  largest  metallurgical 
establishment  of  its  kind  in  the  world. 

A  majority  of  the  members  of  the  Brok- 
en Hill  combination  made  contributions  of 
capital,  and  the  value  of  the  land,  plant 
and  equipment  is  about  one  million 
pounds  sterling.  The  companies  unable 
to  contribute  financially  were  admitted  as 
"suppliers"  of  concentrates,  and  were 
placed  on  exactly  the  same  basis  as  the 
most  important  members  of  this  great 
cooperative  smeltery  as  regards  the  smelt- 
ing, refining,  and  realization  of  silver-lead 
concentrates,  provision  being  made  for 
these  companies  to  contribute  capital 
when  their  financial  position  permitted. 
The  mine  with  the  small  output  was 
placed  on  almost  a  better  basis  than  one 
with  a  large  output,  because  it  secured  for 
its  small  tonnage  of  concentrates  all  the 
advantages  and  economies  of  the  largest 
ore-supplying  companies. 

The  Australian  banking  business  is  di- 

17J 


vided  among  twenty-seven  strong  banks 
with  numerous  branches.  Unity  of  action 
on  the  part  of  the  banks  is  common.  All 
banks  doing  business  in  Australia  quote 
the  same  exchange  rate  on  London,  all 
charge  the  same  rates  of  exchange  be- 
tween different  cities  in  Australia,  and  all 
ask  the  same  rates  of  interest  on  loans. 
The  export  trade  of  Australia  is  in  strong 
hands.  The  meat  export  trade  is  handled 
largely  by  a  relatively  small  number  of 
private  packing  firms,  and  cooperation 
among  them  exists  to  a  limited  extent. 
The  wool  trade  is  handled  mainly  by  a 
number  of  large  firms  with  an  extensive 
organization  of  wool  stores  and  banking 
facilities. 

The  growing  of  linseed  in  Australia 
furnishes  the  "key"  to  the  linseed  oil  in- 
dustry. Among  other  "  key  "  products,  of 
which  Australia  has  many,  may  be  men- 
tioned coal,  from  which  springs  the  coal 
tar  industry,  with  its  many  ramifications. 
Coal  tar  was  not  distilled  in  Australia  be- 
fore the  war,  and  its  valuable  by-prod- 
ucts were  wasted,  but  the  process  was  un- 
dertaken during  the  war,  and  will  prob- 
ably never  be  discontinued.  The  produc- 
tion of  wolfram  ore  provides  another 
"key"  industry  leading  to  the  manufac- 
ture of  tungsten  steel  for  all  sorts  of  mod- 
ern machine  tools.  Tungsten  is  also  used 
for  electrical  purposes,  such  as  contacts 


for  magnetos,  while  tungsten  alloys  are 
used,  among  other  things,  in  propellers 
and  automobile  parts. 

The  treatment  of  zinc  concentrates  is 
another  "key"  industry  from  which 
springs  the  production  of  zinc  and  many 
valuable  zinc  alloys  used  in  the  industry. 
Zinc  is  largely  used  in  the  building  indus- 
try, in  the  production  of  galvanized  iron. 
and  from  it  spring  the  chemical  and  paint 
industries.  The  production  of  manganese 
ore  is  carried  on  in  Australia,  and  is  the 
"key"  to  the  production  of  ferro-man- 
ganese  alloys  and  manganese  steel. 

During  the  last  three  years,  owing  to 
war  conditions,  a  greater  area  has  been 
sown  to  wheat  in  Australia,  the  1917-18 
crop  being  approximately  122,000,000 
bushels.  The  wool  clip  is  estimated  at 
approximately  2,000,000  bales  annually. 
In  1918  Australia  had  10,500,000  cattle, 
2,500,000  horses,  8,000,000  sheep  and 
1,006,000  pigs. 

The  gold  production  in  the  Common- 
wealth was  valued  at  $30,000,000  in  1917. 

The  sugar  production  in  Queensland  for 
the  year  ended  June  30,  1919,  is  estimated 
at  190,000  tons,  and  that  of  New  South 
Wales  at  12,000  tons. 

Note  :  The  Guaranty  Trust  Company  of  New- 
York  maintains  direct,  personal  representation 
in  Australia,  with  headquarters  in  Sydney,  New 
South  Wales.  Credit  data  and  special  trade  in- 
formation of  all  kinds  from  this  source  are  avail- 
able to  our  clients. 


Perth,  the  capital  of  Western  Australia 
[18] 


PaWPhle  v 

I       StocVcton,C^;off 
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